TommyIV's TSP Talk Blog

Stocks continued their climb in January in front of earnings season with small caps leading the way. Since the sell-off following the earnings warning from Apple to start the year, stocks have been bought and are slowly taking back the December losses. The concern is that the indices are now overbought ahead of earnings season leaving too high of expectations and setting up selling on any 'normal' earnings reports to come.

The good news of this week has been that the dip buyers are back to work. Any selling was quickly bought back which is something we have missed since things took a turn in the fourth quarter of 2018. It also seems as though volatility is slowing down, especially with the narrow range of Friday's action. This could be seen as a positive, if it holds, for those of us with TSP accounts making it easier to predict where your entry and exit price will actually be when one makes a new allocation.

Trade negotiation with China are still on the up and up and the dovish tone of the Fed has kept buyers happy. The government shutdown hasn't seemed to effect markets much but it certainly will if its still on the headlines when the market is ready to take a breather.

The S-fund outperformed this week with a gain of 4.85%. The C and I-fund both had gains over 2% as well. The F-fund was down just 0.04% for the week.




Here are the weekly, monthly, and annual TSP fund returns for the week ending January 11th:




The SPY (S&P 500 / C-fund) has moved above its 20-day EMA but slowed down near the end of the week before attempting to surpass its 50-day EMA. This is a crucial spot for the indices as they await earnings season. Traders will decide whether to keep going with the flow or take some profit early in the year. The C-fund was up 2.57% for the week.




The Dow Completion Index (S-fund) was up decently for the week but it too did not make it past the 50-day EMA. That is significant resistance ahead of earnings season but will be a considerable win for the index if it does break above it. There is additional resistance from the falling trend the past four month just above the 50-day EMA so there will have to be a good amount of things to celebrate to see the index jump above so early. The S-fund was up 4.85%.




EFA (EAFE Index /I-fund) was the outlier technically for these indices with it actually making above and staying above its 50-day EMA this week. The top of its trading channel was also broken through. The one thing to keep in mind is the open gap that lies below its 20-day EMA. Although with the different timings of markets across the world, open gaps are common with this index. The I-fund was up 2.11% for the week.




AGG (Bonds / F-fund) took off some after reaching new highs last week. The good news is the index was not far from flat for the week, the support of the sharply rising trading channel had an effect, and the index has a bull flag set up now. That could mean good things if earnings don't end up going so well and stock traders run to bonds for safety. The F-fund lagged the TSP funds this week with a loss of 0.04%.




Good luck and thanks for reading. We will be back here next week with another TSP Wrap Up. You can read our daily market commentary at the Market Comments page. If you need more help deciding what to do with your account, perhaps one of our Premium Services can help.


Thomas A Crowley
www.tsptalk.com
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The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.